Legendary investor Carl Icahn has a dismal assessment of the current economy, according to an article in Morningstar. In a recent speech at the MarketWatch Best New Ideas in Money Festival, Icahn told investors that “the worst is yet to come” but also highlighted possible opportunities.
Though the stock market has been a volatile roller-coaster ride this year, Icahn actually increased the value of his firm, Icahn Enterprises, by 30% in the first half of this year. He pointed to hedging strategies as the secret of his success, and insisted that there are still stocks out there waiting to be snapped up. “…things are cheap, and they’re going to get cheaper,” he told the festival audience, mentioning the oil-refining and fertilizer industries with companies such as CVR Energy as specific ones to keep an eye on, the article reports.
Inflation is the major player in the market’s decline, and Icahn laid much blame at the Federal Reserve’s doorstep, and their over-stimulus of the economy in the years leading up to and during the pandemic. And while he supported the central bank’s recent 75 basis points rate increase, he said he actually would have cheered on an even more aggressive action like a 100 basis point hike.
Icahn has long been an activist shareholder and maintains that stance, and spoke passionately at the festival about today’s companies needing better management. He told investors at the festival, “There’s no holding management accountable,” Morningstar reports.